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Innovation, ownership and profitability

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  • Love, James H.
  • Roper, Stephen
  • Du, Jun

Abstract

This paper considers the relationship between innovation, ownership and profitability for a panel of manufacturing plants in Ireland and Northern Ireland. Previous literature suggests that innovators are persistently more profitable than non-innovators, but little is known about how this link is moderated by external versus domestic ownership. We consider the link between innovation and profits separately for indigenous innovators and non-innovators and externally-owned plants. We also consider the determinants of innovation over the distribution of plant-level profitability, and find that the determinants of profitability - including innovation and external ownership - vary over the distribution from low to high profitability plants. We find support for the view that innovators and non-innovators have different profitability determinants, and that the profitability of externally-owned plants depends on very different factors to those of indigenously-owned enterprises.

Suggested Citation

  • Love, James H. & Roper, Stephen & Du, Jun, 2009. "Innovation, ownership and profitability," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 424-434, May.
    • Handle: RePEc:eee:indorg:v:27:y:2009:i:3:p:424-434
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    More about this item

    Keywords

    Innovation Ownership Profitability Quantile regression Ireland Northern Ireland;

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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